Friday, May 6, 2005 | 11:23 a.m.
The state Gaming Control Board has bounced an application for a restricted gaming license back to its staff and will await word on whether the applicant -- a world-class water skier -- passed a hair follicle drug test.
Kurt Schoen's bid for approval of a restricted gaming license at Fred's Terrible's Tavern on West Russell Road has the potential to create a new dilemma for regulators, who considered sending a recommendation for denial on the request to the Nevada Gaming Commission, which makes final decisions on licensing.
Schoen already has a restricted license at Fred's Tavern on Stewart Avenue, but ran into trouble with regulators after lying about his use of illegal substances. At Thursday's Control Board meeting, he admitted to using cocaine in November but lied about it to investigators conducting background checks for the licensing.
Schoen, a 10-year resident of Southern Nevada, was named earlier this year to the 2005 U.S. Formula 2 Water Ski Racing Team, whose members skim across the water at speeds of 75 to 80 mph.
Now that regulators are aware of Schoen's drug use and his lack of candor with investigators, board members will have to consider whether they want to initiate a license revocation proceeding.
While licensing proceedings place the burden of proof on applicants to convince regulators they are worthy of the privilege, the burden is shifted to the Control Board on revocation matters. Board members must decide whether they have enough evidence to pursue a revocation and would turn prosecution over to the Attorney General's Office.
Schoen and his attorney, J.P. Moran, tried to convince board members to give him a second chance.
"I'm fighting the problem every day," Schoen told board members of his drug addiction. "I take full responsibility for my actions, but I can't go backwards, I can only go forward."
Moran told the board that Schoen's drug use was "a disease like cancer" and that his client is "a new person here trying to take control of this disease."
Moran said Schoen has agreed to submit to urinalysis drug testing three times a week.
But board members remained leery of sending an endorsement to the Gaming Commission. In fact, they were more concerned about Schoen's failure to be candid with investigators as well as potential employers.
Regulators said their investigation turned up information that Schoen had failed to disclose drunken driving arrests on applications for employment filled out in 1995 and in a questionnaire involving a franchising agreement with Herbst Gaming submitted last year.
Schoen said he was "scared and embarrassed," especially since his addictive behavior had evolved into the use of illegal drugs. He said he hasn't used illegal drugs since November.
"Being afraid is no justification for lying," said board member Bobby Siller. "This isn't a criminal investigation. We're trying to help you get through a licensing process."
Siller said he met with Schoen in February and urged him to take a hair follicle drug test -- which can uncover drug use up to 180 days after the occurrence. Although Siller said he urged Schoen to undertake the test right away, he didn't submit to it until Tuesday and the results have not been returned.
Because of that delay, Siller and his colleagues questioned whether Schoen was being truthful about putting his drug use behind him.
Rather than issue a recommendation for denial, board members agreed to refer the matter back to staff so that they can review the latest drug test results at a later meeting.
Steve McDermeit, executive director of USA Water Ski, the organization that oversees competitive water skiing in the United States, said it is too early to determine whether Schoen's testimony would have an effect on his status with the ski team.
He said he would not comment on reports on Schoen's testimony and that athletes under suspicion are entitled to due process.
McDermeit said he first learned of Schoen's testimony when contacted by a reporter.
"We're not going to turn our heads to a situation if there is a concern or a suspicion," McDermeit said today from USA Water Ski's headquarters in Polk City, Fla. "There needs to be some follow-up."
McDermeit said random drug tests are administered to competitive water skiers through the United States Anti-Doping Agency, the organization that oversees drug testing for the U.S. Olympic team and various athletic federations that compete internationally.
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